TOKYO - Japan's fair trade watchdog has given the go-ahead to an internet search alliance between Yahoo Japan and Google after concluding the deal would not violate the anti-monopoly law.
"The commission has decided that at this point it is not necessary to continue investigating whether to take actions under the antitrust law," the Fair Trade Commission said in a statement.
Under the deal announced in July, market leader Yahoo Japan was to start using Google's search technology this year, also deploying its advertising and distribution system, while maintaining its current user interface.
The move was immediately denounced by Microsoft and Japan's top e-retailer Rakuten, which complained the tie-up would give Google near-total control over the Japanese market.
Yahoo Japan said in July it had about a 57 per cent share of Japan's search market, the third-largest in the world, while Google had more than 30 per cent, and Microsoft had around three per cent.
The Fair Trade Commission had once said it saw no monopoly problem with the search alliance, but after receiving complaints from competitors, it continued investigating the announced deal.
The two companies will take up 90 per cent "only in terms of technology", Takujiro Kono, head of the FTC's consultation and guidance office in its trade practices department told Dow Jones Newswires.
The FTC noted that Yahoo Japan and Google have said they will remain competitors in internet search services and web-linked advertisement businesses.
Despite its namesake, the Japanese Yahoo portal is 40 per cent owned by telecoms operator Softbank, while Yahoo holds a 35 per cent stake.
Rakuten is a top internet retailer rapidly expanding its global operations, having launched a new online shopping mall in China earlier this year.
The European Commission earlier this week said it had opened an antitrust investigation into allegations that Google abused its dominant position in online search.